In this series, I will comment on the written feedback I received after my presentation. Also, I will answer the online questions asked by students I had no time to amply reply to during said presentation
Lehren für Unternehmensführer – das Leben, das Wissen, die Informatik und die Ethik
(Permanent Link to Lessons For Managing Directors – Life, Knowledge, Computer Science and Ethics)
„Innovative Entrepreneurs“ / Summer Semester 2010
Leadership in growth-oriented enterprises
Here is another item of feedback I also consider quite important:
“The speaker tends to put market leadership on the negative list among the enterprise goals”
In my opinion, the motto “An enterprise should aim at becoming the market leader” is based on an antiquated understanding of entrepreneurship. It sticks to the following doctrines:
- Unlimited growth;
- Advantage through number of pieces (in theory, every item could be produced for 1 EURO …);
- Advantage of central organization (“following the example of the Reichswehr”);
- A global world with minimum time-place threshold (negligible transport costs, just-in-time delivery);
- The power of concerns, especially relative to other social groups (more powerful than states…);
- The superior knowledge of huge enterprises (a large one always knows more…).
Above all, however, this theory takes it for granted that the market leader no longer has to follow the market. Instead, he can design the market to fit best for his own maximum gain.
As I see it, the world changed drastically – not least because of IT and the WEB 2.0 – and will continue to change in the future. Unbelievably much is currently happening and soon totally different characteristics will be competitive advantages:
- Regionally adapted business practices;
- Sustainable strategies, both on a small and broad scale;
- No more exclusive orientation of an enterprise towards the shareholders’ (equity holders’, capital) interests;
- De-centralized organisation;
- Independence and self-responsibility in small structures;
A high degree of flexibility for solving any crisis, following the subsidiary principle when decisions have to be made (decisions to be made on the lowest possible level);
Shared production of even very complex products through cooperation at eye-level among many small partners.
To me, it seems like “collaborative” enterprises based on self-organisation (the Semco System as one of the founding fathers of these concepts might serve as an example) are going to gain more and more ground against the traditional and hierarchical stakeholder value structures. There is no doubt that this development will be quite exciting.
In the past, for many firms the problems started with the moment they had gained market leadership position. The way towards market leadership was full of sacrifices, which then made the defence of this position again harder than the original process had been. More often than not, what you get in the end is a huge slump and the total loss (for example with Siemens in the communications sector).
The medium-sized (or even small) players on the market often have better results and more sustainability than the market leaders.
There are exceptions to the rule, such as CocaCola. CocaCola almost managed to monopolize an entire sector, which is the most extreme form of market leadership. They still have the entire world under control. Even Pepsi with all the pains they are taking cannot really change very much about that. So CocaCola might just be “the exception to the rule“.
On an emotional level, I am very sceptical about a few huge contenders permanently fighting for market leadership on a global market. Personally, I find it gross to be dependant on Inbrew, Müller-Milch, Nestle, Bounty, Aldi&Lidl, Reemtsa (if I were a smoker) and Microsoft. It annoys me to hear these kinds of enterprises stating their goals (up to 50 % of the turnover, all of which I, the consumer, have to pay eventually). I prefer a market with many small and regional players.
RMD
(Translated by EG)
Loading ...